Elizabeth

We bring you the best and most informative housing news every week. Whether we found new home purchase programs, home improvement tips, market trends, great mortgage advice or useful stories, you can find them all here. We update our housing round up every week so come back regularly.

So will 2013 be the year of recovery or relapse? Evidence points more strongly to a continued rebound, albeit one that still has considerable headwinds and that varies from one market to another. Also for years, housing analysts have warned that a glut of delinquent mortgages—a so-called “shadow” inventory of eventual foreclosures—would overwhelm housing markets. That hasn’t happened. This week, we’ll offer 5 areas of focus for 2013.

Nearly 16% of the fixed-rate mortgages that lenders sold to Freddie Mac during the third quarter were 15-year loans, up from almost 10% a year prior, according to the agency’s data. (That data doesn’t include refinancings.) And 15-year mortgages accounted for nearly a third of refinanced loans during the first seven months of this year, according to the latest data by CoreLogic . The figure has been climbing since 2007, when they made up just 8.5% of refinancings

There are so many factors that come together in a given day that mortgage rates fluctuate daily. It is not uncommon for rates to range over one half of a percent during the course of 30 days. Know this; even if rates are trending down (or up) it is not uncommon for there to be short term changes in direction that could go against you during the 30-45 days that it takes to close your loan. Because of this, I will always recommend that you lock your loan as soon as possible. This advice is the same whether you are buying or refinancing.

In my conversations with Realtors, I often hear how 203k loans never close or take too long. I agree that 203k loans take longer and are more difficult to originate than a standard loan product, but not significantly if you educate yourself on the product and work with competent partners throughout the process. Below I have five essentials steps to take prior to signing a purchase agreement and beginning the loan application. Following these five steps will prepare you for a successful FHA 203k loan transaction.

Among the changes, borrowers with credit scores between 580 and 620 will face stricter underwriting standards. Such borrowers will face stricter limits on their debt-to-income ratio. The FHA also will soon require a minimum down payment of 5 percent for high-cost mortgages that exceed $625,500. FHA also plans to suspend its popular reverse-mortgage option, which allows those 62 years and older to take cash out of their homes in a big, upfront payment. FHA will be replacing it with the Home Equity Conversion Mortgage saver.

Brad and Joan Zetterlund’s lives first started melting down nearly four years ago when they decided to refinance their home to take advantage of lower interest rates. Instead of a new mortgage, they were mistakenly put into foreclosure. Their home was sold at auction on the courthouse steps. They got a knock on the door and were told they had three days to get out. Bank of America, which had bought the mortgage as part of its purchase of mortgage-lender Countrywide Financial in 2008, tried to remedy its error. The bank purchased the house from the third-party investors who had bought it and returned it to the Zetterlunds in January 2011. The story should have ended there, but it didn’t.

1 – If you let your home go to foreclosure you are done with the situation and you can walk away with a clean slate. The reality is that this couldn’t be any farther from the truth in most situations. You could end up with an IRS tax liability and still owing the bank money. Let me explain. Please keep in mind that if your property does go into foreclosure you may be liable for the difference of what is owed on the property versus what is sells for at auction, in the form of a deficiency balance! Please note this is state specific.

Homelessness is up 16 percent among families in major cities since the beginning of the foreclosure crisis, according to a report from the U.S. Conference of Mayors, and the number of renters affected by foreclosure has tripled in the past three years. While public attention has centered on homeowners, research shows rental properties constitute an estimated 20 percent of all foreclosures, and 40 percent of families facing foreclosure-related evictions are renters. Those numbers translate into millions of Americans at risk of homelessness, many of them children.

Lenders, banks and credit unions are experiencing higher aggregated volume than their normal operational capacity supports during this time of year. Daily, lenders are dealing with a radically increased demand for refinance money over purchase money requests. So, will your refinance close? Yes, but it will probably take more than 30 days. Given the increased appetite for debt restructuring, deciding which company will support your transaction the most efficiently can help you stay ahead of the curve.

The FHA was created in the midst of the Great Depression to help Americans own homes affordably. But, after analyzing 2.4 million FHA mortgages, researcher Ed Pinto wrote that lax FHA lending policies create pockets of foreclosures in poor neighborhoods in some cities. Pinto says the FHA’s low down payments, looser credit requirements and higher debt-to-income ratios let lower-income households take on debt they can’t afford, making them vulnerable to foreclosure and putting the country at risk for having to bail them out.

The idea of junking or severely limiting, the deduction for tax purposes of interest on home mortgages is just plain foolish. Look, we are just barely limping off the bottom of a residential housing catastrophe, and home buying and building are finally reviving. If we could get housing roaring back, that would go a long way towards full recovery for our economy. Obviously, taking away the home mortgage interest deduction is the very last thing the housing market needs. It wouldn’t hit every home buyer, but a home is an investment. If we lower the return on an investment, well, you get the picture.

The average deduction taken as part of this tax break can save consumers more than $12,000 per year in some states, but shockingly, few people actually choose to take advantage of the deal, according to new research from USA Today based on data from the Internal Revenue Service. In 2010, only 26 percent of consumers across the country wrote off the interest that they paid on their mortgage over the course of the year as part of their taxes, and in many states, that rate is even lower.

Profits of independent mortgage banks and mortgage subsidiaries of chartered banks rose by more than $300 per loan in the third quarter of 2012 the Mortgage Bankers Association (MBA) said today. Increased volumes of applications for both purchasing and refinancing and secondary market gains resulted in an average profit of $2,465 on each loan originated in the quarter compared to $2,152 in the second quarter.

About 44% of Americans believe the economy is now on the right track, and only 50% say it’s on the wrong track, which is 25-percentage point decline over the past year. The small gap between those two indicators suggests more improvement in overall economic confidence. The number of survey respondents who foresee an increase in mortgage rates jumped 4 percentage points to 41%. Respondents expecting home prices to fall over the next year rose by 4 percentage points to 14%.

As per the current FHA guidelines a consumer has to wait 3 years before entering into a contract unless there were some some compelling circumstances surrounding the hardship. The most acceptable one is related to medical issues. Before you grab the car keys or pick up the phone to call your Realtor there are a few things that you need to be prepared for…

Twenty-three percent of respondents view this as a good time to sell a house, up 5 points from October and the first time this metric has crossed the 20 percent line. Seventy-two percent view it as a good time to buy a home, unchanged from October and a number that has held relatively stable for most of 2012. Asked if they would buy or rent their next residence should they move, 67 percent say buy, up one point from the previous month and 29 percent said rent, unchanged from both September and October.

As the housing market continues to show improved signs of strength, many first-time home buyers are failing to benefit from the broader recovery. A survey found that first-time home buyers were purchasing only 34.7 percent of the homes sold in October. That’s down from 37.1 percent in September. First-time buyers are the only group that has not purchased more non-distressed properties in the last five months.

In essence, more American homeowners are trying to pursue money-saving refinancing so they can take advantage of historically-low interest rates that are currently hovering around 3.875% for a traditional 30-year fixed-rate mortgage (and 3.750% for a 30-year fixed-rate loan through FHA). This increase in mortgage loan activity has come as a result of loosened loan restrictions on the part of Fannie Mae and Freddie Mac. For investors who play in the mortgage bonds market, the news is troubling because of the impact it could have on their investments.

The money saved each month on your mortgage can be poured into other investments that could pay off in retirement, whether that’s a 401(k) or IRA or cleaning up other debts. Consider this: A homeowner who’s 52 today and who wants to retire at 70 bought a home in 2002 with a $250,000 mortgage. He refinanced at 5% in 2003. If he refinanced again into a 3.49%, 30-year fixed-rate mortgage, his payment would go down $415 a month, according to Gumbinger’s math.

People who opt for a low- or no-fee refinance–offered by a number of banks these days to attract and retain more customers–will end up paying back the savings over the course of the loan, most likely in the form of a slightly higher interest rate: “Lenders are getting people in the door because people don’t want to have to pay that cash out of pocket. But it’s important to remember there’s no such thing as a free lunch.”

Freddie Mac is raising demands to banks to repurchase certain defaulting mortgages that were sold to both government-sponsored enterprises. Freddie Mac informed U.S. Bancorp and other banks during the Goldman Sachs ($116.57 -0.63%) Financial Services conference that the GSE would demand banks to take back defaulting mortgages made in 2004 and 2005. Previously, both Fannie Mae and Freddie Mac only demanded banks to take back mortgages made in 2006 or later.

The reason is that the rise in prices is mainly due to investors, mostly large hedge funds, that have been swooping into the most distressed markets and inhaling properties as fast as their plentiful cash will allow. They are turning those properties into rentals, and getting anywhere from 8 to 12 percent returns on their investments, thanks to still hot demand. The trouble is, as home prices rise, those returns shrink.

It does not take more than a minute (if you do a search on Google™) to find a blog or article written by a REALTOR® which extols the virtues of buying a home. And there is a better than even chance that “Now is the Time To Buy” will be included in the first paragraph or title of the article. With this in mind, I thought I would write about the counter argument, why Now Is Not The Time To Buy A Home. You see…

If you can get your bids in by December 14th, you still have time to inspect, check title and close by December 31st. At this time of year, the banks are anxious to get their extra inventory off their books. If you can make cash offers, many banks will come down in price if you can close ASAP. Here are a number of strategies you can use to ensure successful closings.

Writer – Always make sure you educate yourself a bit before taking on a purchase . We had already put a binder on our first house then we got all the bad news. The house was not in foreclosure yet but we had to pay all the back payments and late fees to get the house. Was still not a bad deal but would have had some negotiating power had we known what we needed to prior. And get a good educated Realtor .

The breakout in buyer traffic coincided with the absolute low in the NAR’s national median home price. Buyer traffic leveled off in April, and 2 months later so did prices, dropping since then in the usual seasonal second half decline. Seller traffic bears watching here. It’s in a position to make a higher low. If sellers return to the market in big enough numbers, that could put a lid on prices or at least slow the rate of growth. To that extent, this is an interesting indicator that can give us advance warning of any change in trend.

“It’s an income stream for us, and when it’s time, we’ll sell it and make more money than we could from our 401K,” said Haisley, 49, who rents out the property for $900 a month for an annual return of more than 20 percent, excluding appreciation. “There’s nowhere for prices to go but up, so it seemed like a pretty safe bet.”

“While this represents a step forward in combating the foreclosure crisis, HUD’s DASP program touches only a fraction of the distressed homeowners with delinquent FHA-insured loans who are in dire need of assistance. The nearly 40,000 loans that HUD plans to have auctioned off by the end of next year is just a sliver of the 700,000 seriously delinquent mortgages on the FHA’s books.

Satisfaction with primary banks was a respectable 81 percent but study participants expressed frustration with some current mortgage practices and indicted that these could drive them to consider alternative providers. The most frequently referenced issues were high interest rates, high payments, and dealing with taxes and escrow. Eighty percent of those surveyed, in fact, said they would consider obtaining a mortgage from a non-bank.

While a fiscal cliff threatens the economy as a whole, real estate has its own fiscal cliff that’s quickly approaching. And unless certain rules, laws and programs are extended, we could see a huge falloff in the recovery of the housing market. Potential borrowers might want to get their transactions completed in front of those changes, since they might push rates and fees higher in their respective wakes. Here are 5 items with approaching expirations that could seriously threaten the strides we’ve made so far.

Washington, DC – The Federal Housing Finance Agency (FHFA) today announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. In most of the country, the loan limit will be $417,000 for one-unit properties. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA), and are calculated each year.

A new study from Fannie Mae suggests that consumers could save money and find a more financially sustainable mortgage if they shopped more effectively. Further, the study showed that higher income consumers were more likely to do more research and approach the search for a mortgage more efficiently. For example, lower income survey respondents were more likely than those with a higher income to have obtained a quote from only one lender and to make less use of technology in their mortgage due diligence.

Crystal is contemplating what mortgage experts call a “strategic default” — walking away from an underwater home when the borrower has the ability to pay. Her approach appears to dovetail with others trapped in homes worth far less than their original sale price. In a national survey last month, 32% of the 1,026 U.S. polled said homeowners should be able to strategically default on a mortgage without consequences. Seventeen percent said they know someone who’s walked away from their mortgage, and 13 percent said they likely will do so themselves.

Homes priced at market value and in good condition will be listed and sold quickly – perhaps in a week or less. Your opportunity is to watch for stale listings. New buyers often assume there must be something wrong with these listings because they haven’t sold in several weeks, perhaps even months. Homes that sit don’t necessarily mean there is something wrong with them. They might need work or perhaps the location is not ideal. But that doesn’t mean the home is not right for you. Look at days on market as a potential opportunity.

The couple’s “finished” basement became entirely flooded when their sump pump failed. Although the previous owner supposedly had just installed and tested the existing sump pump — and had not declared any previous water problems — before the sale, the Treher family found themselves not only with a soaked basement but with draining issues throughout the entire home. (The real estate disclaimer given to the Trehers before purchase listed no issues with the home other than upgrades and repairs that had supposedly already been completed.) What did they do…

“Can i re apply for Fha loan after being denied by Wells Fargo, when i applied my mid was 614, I received a commitment letter saying i was APPROVED, they denied me on the last day and told me it was denied. Now the second part of my question is should i re apply now that my mid is 640 (631,640,677) to see if i can be approved via automated underwriting?” The answer is…

If you’re getting a gift of downpayment from a family member or spouse, though, you’ll want to make sure you do it properly. Do it wrong and the bank may turn down your loan in underwriting. As compared to last decade, mortgage lenders have tightened downpayment requirements. Banks now ask buyers to have some “skin in the game”; to bring their own funds to closing. The amount doesn’t need to be large, either. There are a number of high-profile loan programs for which downpayment requirements remain small

One in every 706 homes received a foreclosure filing in October, according to RealtyTrac’s latest foreclosure report. These foreclosed homes often sell at significant discounts to similar non-distressed homes. We drew on RealtyTrac’s report to highlight the 10 states with the highest discounts on foreclosed homes. Note: Savings are measured by comparing average sales prices with average foreclosure sales prices.

While non-distressed property purchases have increased, first-time homebuyers have become less active in the non-distressed property market. The share of non-distressed property home purchases from first-time homebuyers is down to 33.6 percent in October from 38.7 percent in June. The survey highlighted two key factors to explain the decrease in non-distressed property purchases from first-time homebuyers. One has to do with higher prices for homes that are not in distress. The second reason is the lack of available financing for first-time homebuyers.

Q: I recently signed a lease in July for myself and my three children. My spouse recently moved in September and after notifying my landlord he said there would be a rent increase, is this legal? A: If its month to month, or a lease that has expired and turned into a month to month they can raise your rent for any reason by just giving you a notice. If you are in a current lease then you’ll have to check to provisions in the lease. Just because a person is a spouse doesn’t mean you can move them in without notifying the landlord if they weren’t there in the beginning.